The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Duty-free zones could be the saviour for a “dying” Bahamian retail industry, the Downtown Nassau Partnership’s co-chair said yesterday, although they will not be the sole panacea for Bay Street’s woes.

Charles Klonaris told Tribune Business that global competition, combined with relatively high prices and taxes, meant retailing was no longer a “growth industry” in the Bahamas.

But, while backing calls by Obie Wilchcombe, minister of tourism, for Bay Street to be designated as a duty free shopping centre, Mr Klonaris said this measure by itself would not be enough to transform downtown Nassau’s fortunes.

He told Tribune Business that the “key component” to any revival will be the long-anticipated, and demanded, waterfront boardwalk stretching from Woodes Rogers Wharf to Potter’s Cay.

And, to encourage Bahamians and residents to return to the city, Mr Klonaris added that it was imperative that downtown Nassau’s chronic parking problems be resolved.

The Downtown Nassau Partnership co-chair, while agreeing with Mr Wilchcombe that downtown Nassau was “dying” as a city centre, said that the combination of duty-free retail with a boardwalk could create 1,000 jobs by reviving the area ‘east of East Street’.

Addressing the merits of the Minister’s ‘duty free’ proposal, Mr Klonaris said: “Retailing is not the growth industry in this country any more because of the way globalisation is.

“Duty free would be a welcome addition to help the retail industry grow. I think it would not exactly be a fix, but it would be a quick catalyst for getting these [empty] retail shops on Bay Street occupied again.”

With Value-Added Tax (VAT) exacerbating already-high costs, many Bahamian retailers have become increasingly uncompetitive on price versus their counterparts in south Florida and elsewhere.

While technology savvy, worldly wise Bahamians have turned in drove towards e-commerce, purchasing clothing and electronic goods online in a bid to exploit lower prices in other countries. This, in turn, has fuelled a surge in the number of freight forwarding companies based in the Bahamas.

“It’s important for retailing to compete worldwide, and the way duty adds up with VAT, it’s expensive,” Mr Klonaris said. “Duty free is probably the only avenue to revive a dying industry.

“It would also be a welcome first step in reviving the city. It is a dying centre, and it needs to be revived just to create jobs alone. I think duty free could be a good catalyst to get things going.

“The redevelopment east of East Street could be 1,000 jobs if we got a boardwalk plus duty free. That would be huge. It would bring credibility back to the city.”

The much-debated boardwalk is widely viewed as infrastructure that would help disperse disembarking cruise ship passengers down the length of Nassau harbour, all the way to Potter’s Cay.

This, in turn, would ensure Bahamian merchants and businesses gained a more equal share of the cruise tourism ‘pie’, while also helping to spur the redevelopment of the former shipping properties ‘east of East Street’.

Meanwhile, improvements to parking and public transportation, which have long been sought by the DNP and its members, would help entice locals back to downtown Nassau.

Mr Wilchcombe earlier this week told Tribune Business that turning downtown Nassau into a duty-free shopping zone will ultimately lure more tourists as well as locals, adding that the area has too many jewellery stores and had been ‘infiltrated’ by foreigners.

Mr Klonaris, who together with his brothers developed the Elizabeth on Bay plaza at the junction of Bay Street and Elizabeth Avenue, told Tribune Business that downtown Nassau’s revival required a combination of initiatives.

“Everything will help, but the most important thing for ‘east of East Street’ to move is the boardwalk,” he said, adding that improved parking facilities would entice Bahamians and locals to return.

“It’s more than duty free,” Mr Klonaris told Tribune Business. “It would be a big boost, but in terms of the long-term and the future, a boardwalk is the key component to the success of downtown east of East Street. It will encourage restaurants, encourage development.”

He added that “the city died” with the loss of public parking space, and argued that the harbourfront boardwalk was the only way to make downtown Nassau self-sustaining.

Mr Klonaris said Bay Street’s rebirth was critical to the Bahamian tourism product, as there were few successful global tourism destinations that did not have an attractive city centre.

The DNP co-chair emphasised that stopover tourists tended to remain on resort properties, because they felt the product that the Bahamas offered outside these areas was inferior.

Many cruise passengers already opt to head for Atlantis’s water park and Marina Village instead of downtown Nassau, and they will have a second potential attraction to choose from if, and when, Baha Mar opens.

“I’ve never seen a successful tourist destination without a proper city,” Mr Klonaris told Tribune Business. “Because the city is not what it should be, the tourists don’t venture downtown because it’s not what they’re looking for.

“If we’re going to have a high quality tourist destination, the city has to play an important role.”